Taking into consideration the increasing demand for coal from the power sector, the Ministry of Environment and Forests recently further eased the guidelines for grant of environmental clearance to coal mining projects seeking one-time expansion of production capacity within existing mine lease area.

In an office memorandum dated July 28th, the MoEF said that the Expert Appraisal Committee could allow exemption of public hearing after due diligence in respect of one-time capacity expansion proposals of existing coal mining projects with production capacity exceeding 16 MTPA subject to a ceiling of 5 MPTA additional production provided the transportation of the additional production of coal was proposed by conveyor and/or rail transport.

The MoEF took the decision with regard to easing the guidelines following a request from the Ministry of Coal. Given the power crisis facing large parts of the country and the rapidly rising demand for coal from power plants, the Ministry of Coal is under intense pressure to quickly ramp up coal production.

In December 2012, the MoEF through an office memorandum had issued guidelines for exemption from public hearing in respect of coal mining projects which applied for one-time capacity expansion of up to 25 percent in existing mining operation within the mine lease area. The guidelines fixed the ceiling on additional production at 2 MTPA where transportation of the additional production was proposed by road and at 5 MTPA by conveyor and/or rail transport.

In response to the guidelines issued by the MoEF, the Ministry of Coal said that the capacity expansion cap of up to 25 percent was inadequate since it resulted in relatively small increase in production in absolute terms for small mines.

In January this year, the MoEF issued another office memorandum stating that for expansion proposals of existing coal mining projects with production capacity up to 8 MTPA as per the environment clearance letter, the limit of one-time capacity expansion could be considered as 50 percent or incremental production up to 1 MTPA, whichever was more, in the existing mining operation within the mine lease area.

In May this year, once again on the basis of a request from the Ministry of Coal, the MoEF decided that the exemption given for one-time capacity expansion of coal mining projects with production capacity up to 8 MTPA as per the January 2014 office memorandum would also be applicable to those projects of up to 8 MTPA capacity that had already availed the exemption earlier under the December 2012 guidelines. It also decided that coal mining projects with production capacity exceeding 8 MTPA and up to 16 MTPA would be given further exemption under the December 2012 guidelines so as to enable them one time capacity expansion with additional production up to 4 MTPA if the transportation proposed for the additional production of coal was conveyor and / or rail transport. The decision was taken to correct an anomaly. As per the additional production limit set in the January 2014 office memorandum, the additional production allowed for projects up to 8 MTPA capacity stood at 4 MTPA, but for projects with capacity more than 8 MTPA and less than 16 MTPA, the additional production allowed as per the December 2012 guidelines was less than 4 MTPA.